Lending Works Reveals £8.8m Invested in ISAs in Under Two Months

OFF3R Partners and the UK’s third-largest consumer peer-to-peer lending platform, Lending Works, has released an infographic with statistics pertaining to capital invested into the new Innovative Finance ISA (IFISA).

Nearly £9 million has been invested since the ISA launched on 8th February 2017

Stats also suggest ISA investors are more likely to be male, of pensionable age and from London/South East

Lending Works, the first peer-to-peer lending platform to have insurance protecting lenders against certain borrower default risks, has today revealed that £8.8 million has been invested into the company’s Individual Savings Account (ISA) since its launch on 8th February 2017.

Peer-to-peer lending was included within a new category of ISA – the Innovative Finance ISA (IFISA) – from 6th April 2016, and, having gained full authorisation from the Financial Conduct Authority and ISA manager approval from HM Revenue & Customs in the latter part of last year, Lending Works became the first member of the industry body Peer-to-Peer Finance Association to launch its ISA two months ago.

The headline figure forms part of a wider infographic published by the platform, which further dissects the origins of these ISA investments over the 57-day period from launch until the end of the 2016/17 tax year. Given that there are no limits on transfers of ISA funds accumulated in previous financial years, the largest individual investment to date within a Lending Works ISA stands at £154,190, while the average amount invested among the 815 ISA investors currently stands at £10,769.

Nick Harding, founding CEO of Lending Works, commented:

“It has been very encouraging to see lenders choosing to use Lending Works over the myriad of other investments available to them this ISA season. Take-up has been stronger than expected, particularly given that we have not even started advertising the product to new customers yet. Many of our lenders are vastly experienced, savvy investors, and to have them voting so emphatically with their feet in favour of the Lending Works ISA tells us that a very bright future lies ahead for peer-to-peer lending and ISAs.

“We forecast that the Lending Works ISA has the ability to generate enough capital to fulfil our ambitious plans over the next three years, generating £100m+ each year as we grow our business.”

Interesting trends develop

The infographic also revealed that 62 per cent of ISA funds invested came courtesy of new subscriptions, while the remainder was transferred in from other ISAs, including cash ISAs, stocks & shares ISAs and even some from other IFISAs.

Of the other insights from the data, it was notable that nearly a quarter (23.2%) of ISA funds invested came from those aged 65+, while nearly three quarters (73.7%) was sourced from those aged 50 or older.

Males account for 69 per cent of total ISA funds received to date, while the average amount invested by both genders is strikingly similar (£10,602 for males versus £11,064 for females). In terms of geography, most of the United Kingdom has been well represented, although London and the South East (26.1%), along with the Yorks & Humber region (11.1%), are leading the way.

Harding added:

“It’s been fascinating to assess the cross section of ISA capital which has flowed into Lending Works over the past two months, and we note with interest some of the trends which have emerged across various demographics.

“For us, it is intriguing that a high proportion of incoming ISA funds have come from other, pre-existing ISAs, and it is great to see so many customers choosing Lending Works by transferring their ISA from many different banks and investment managers. We believe this represents further vindication that our sector provides a viable and beneficial alternative in terms of risk and reward.”

Lending Works launched in January 2014 to provide UK customers with a safe, flexible and transparent way to lend and borrow money. The company currently facilitates over £4.5 million in loans per month between lenders and borrowers around the UK and, as at April 2017, has lent around £50 million.

Protecting customers’ money is the company’s highest priority. Lending Works’ lenders are protected by the Lending Works Shield which includes a reserve fund held in a ring-fenced trust and an industry-first insurance against a range of risks affecting borrowers’ ability to repay loans, including loss of employment, accident, illness, death, fraud and cybercrime.

Lending Works is a member of the industry-body Peer-to-Peer Finance Association (P2PFA). Lending Works is authorised and regulated by the Financial Conduct Authority.

About the author

Lily Bridgwood

Lily is the Partnerships Associate at OFF3R. She has previous work experience in both the corporate and start-up environments. She joined the OFF3R team in October having recently graduated with First-Class Honours in International Business from the University of Edinburgh.

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